Economies of scale are illustrated by
A)a company declaring that they will not have sales,but will maintain very low prices all the time.
B)the price of a taxi ride service increasing after 2 a.m.
C)a supplier using a third party logistics firm.
D)a supplier waiting until enough demand has built up to send a full truckload shipment to their customer.

Question

Quizplus · Accepted Answer

The supplier waiting until enough demand has built up to send a full truckload shipment to their customer is an example of economies of scale. By waiting to send a full truckload, the supplier can spread the fixed costs of shipping over a greater number of units, reducing the average cost per unit of transportation. This is a form of economies of scale. The other options do not represent economies of scale.

Economies of Scale Are Illustrated by